Taxes When Buying a Property in Malta


Malta has become a popular Mediterranean property investment destination among residents and non-residents. From year-on-year GDP growth to favorable tax laws, Malta provides benefits galore. The Interesting Info about real estate in Malta.

Individuals pay taxes according to their territorial, source, and remittance tax status, with deductions available depending on their situation.

Stamp duty

Understanding how taxes work is crucial for those considering purchasing property in Malta. Once you’ve engaged a notary and real estate law specialist lawyer, the next step should be searching for properties that meet your specifications; once found, negotiations with sellers until an agreement can be reached can commence before signing a promise of sale (known as Konvenju) which then requires paying stamp duty.

Stamp duty in Malta is a government tax levied on transfers of ownership of immovable property. It is generally set at 5% of the purchase price; however, first-time buyers may qualify for a 3.5% tax rate discount, provided they do not own any other properties worldwide.

As well as stamp duty, registration fees, and an AIP permit (Acquisition of Immovable Property). The Malta Land Registry charges this fee of 233 EUR to acquire immovable property; you’ll need to register your house with its local Land Registry as it is an essential condition of purchasing one in Malta.

Capital Gains Tax

Malta levies a capital gains tax of 12% when selling real estate, a one-time charge that does not increase with property value. Buyers pay this fee directly to a notary public, who forwards it to Inland Revenue; as it cannot be deducted, sellers must owe this charge regardless of whether their property was previously rented or vacant.

Real estate investments in Malta are highly profitable investments that can bring lasting rewards. Prices have increased annually between 5-10% and 15-20% for properties yet to be built. Furthermore, renting in Malta tends to be significantly less than in many other countries.

Malta is part of the European Union and does not impose double taxation upon residents and non-residents. Furthermore, over 80 dual taxation treaties have been signed between Maltese entities and other nations so that people from EU states, Australia, Canada, China, India, Israel, Russia, or the USA do not need to pay tax both here in Malta as well as back home.

When purchasing real estate in Malta, you must hire a notary representing your interests independently of the seller’s. A notary will conduct searches to ensure the property has legal title and help you apply for bank loans if needed. Afterward, once contract details have been agreed upon; they will prepare two contracts: original convened and final sale agreement.

Inheritance Tax

The purchase of property in Malta can be an exciting venture, but it’s essential that you fully comprehend the associated taxes. Aside from stamp duty payments, additional rental income taxes might apply depending on your circumstances; you might even qualify for exemptions or tax credits depending on the specifics of your situation – consult a tax consultant in Malta to gain more insight.

Typically, no AIP permit is necessary when buying property in Malta; however, you should ensure it’s registered under your name and meets other criteria (for instance, a minimum annual rental value of EUR 16,000). Furthermore, Special Designated Areas in Malta offer incentives to buy real estate there.

Notaries register a deed of causa mortis when inheriting property in Malta, which declares ownership and valuation for your inherited property. When selling off such an inheritance, any differences between its current sale price and what was said must be subject to capital gains tax.

The Maltese government has taken several measures to strengthen its property market in 2020, such as lowering stamp duty from 5% to 2% and offering tax exemptions for first-time buyers. Furthermore, residency and citizenship programs for investors who purchase property here were extended further.

Income Tax

Malta is renowned as a European tax haven, drawing people from around the globe looking for better living standards and business environments. Notably, aside from low personal taxes rates, no wealth or inheritance taxes are applied against individuals or companies operating here, making Malta particularly appealing to foreigners with permanent residency status.

Purchasing property in Malta requires a deposit and the first fifth of stamp duty – equivalent to approximately 1% of the purchase price – payable when signing your Konvenju, the contract of sale agreement. Your notary will also conduct all necessary searches to establish that you hold clear legal ownership.

Malta’s standard property transfer tax rate is 8% of property value. Under certain conditions, however, you may qualify for reduced final withholding tax rates, especially if this will become your main home.

Additionally, properties rented out for commercial use must pay income tax depending on your taxable income and tax bracket. Furthermore, value-added tax (VAT) must also be applied at each stage in the economic chain and then passed along to customers as taxes due.

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